Are you investing in the top-performing super funds in Australia?

Whether or not you take a close interest in your superannuation or not, it forms one of your investment assets. You wouldn’t invest in a company that didn’t perform, so why would you leave your retirement plans in the hands of a non-performing fund?

The truth is that many Australians don’t think to check what their superannuation is doing and how it might compare with other options. They should. Every little bit of compounded performance could be the difference between that barista-made coffee – or the instant coffee at home. (Yes, exactly like those highly annoying Industry Super advertisements tell you).

Since many Australians are ambivalent about their superannuation, chances are they might also be in the wrong fund for their needs and goals. Generally speaking, someone in their 20s has a longer timeframe and ability to bear the risk and therefore a conservative, low-growth approach would not be as suitable for them. On the flip side, your average 80-year-old is probably not likely to find a high growth-oriented portfolio ideal when their risk tolerance for market loss is far lower.

In this wire, I’ll take a closer look at what you should know about your superannuation fund and the top-performing funds over five years.

Superannuation is a managed investment

Just as other managed funds you might directly invest in, your superannuation fund has fund managers and specialists behind it. The typical superannuation fund will be a diversified mix of assets (equities, fixed income, property, alternatives, cash), will often use a blend of fund managers such as the ones you know and love for their exposures and may include some more direct investments ranging from currencies to commodities.

Some specialists might analyse the optimal blend of assets and funds for each fund offered by a superannuation provider for longer-term positioning (aka the strategic asset allocations), and teams in charge of ‘tactical tilts’ – that’s where investments might be added or removed to offer a fund defensive positioning or growth exposure to a medium-term trend or theme in markets.

There is also a range of options you can select for your default super option. SuperRatings classifies the standard options as follows – there may be some variation in how providers term their offerings. The percentages listed refer to the ranges of growth assets used in the options.

• Secure 0-19%
• Capital Stable 20-40%
• Conservative Balanced 41-59%
• Balanced 60-76%
• Growth 77-90%
• High Growth 90-100%

Contributions and your superannuation

As you would be aware, your Superannuation Guarantee (SG) contributions are paid by your employer into your superannuation directly and represent 11.5% of your salary.

These form part of Concessional (pre-tax) contributions, and you can contribute up to $30,000 per financial year this way to your superannuation from your pre-tax salary. A 15% tax applies to these contributions rather than your usual marginal rate unless you earn over $250,000 per annum, in which case, an additional 15% tax may apply. You can carry forward unused concessional contributions from the last five years if your total superannuation balance is below $500,000.

Non-concessional (after-tax) contributions are any contributions you make to your superannuation from your earnings after you have paid tax on them. You can contribute up to $120,000 per financial year this way if your total superannuation balance is below $1.6 million. You can also bring forward up to 3 years’ worth of non-concessional contributions in one year, allowing you to contribute up to $360,000.

You can find more details on contributions at ato.gov.au.

Who are the top-performing superannuation funds?

For comparison’s sake, I’ll focus on Growth and Balanced options – with Balanced being the most common default option – but for many, growth or high growth might be more appropriate.

I’ve used SuperRatings' top 10 data (current as of 30 June 2024) and opted for a 5-year return period. Ideally, it’s good to look at performance across market cycles as superannuation is generally a long-term investment. I’ve also gone through and added their 1 and 3-year returns so you can see different periods.

You can scroll through the table by moving the cursor at the bottom.

The top 5 Balanced Funds ranked by 5-year returns

Source: SuperRatings, 30 June 2024

The top 5 Growth Funds ranked by 5-year returns

Source: SuperRatings, 2024

What next?

If your own superannuation fund isn’t in the mix, never fear. That doesn’t mean it’s not still the right option for you – particularly when you also consider the fees and insurance costs attached.

However, if you do think now is time to jump ship, there are a few things you could do…

1. Speak to an expert for advice. In some cases, you may be able to access free or lower-cost appointments with financial advisers via your superannuation provider which can help you identify which superannuation option is most suitable for you.
2. Compare, compare, compare. A good starting point is the YourSuper comparison tool within your myGov account – you can find out more here. Think about performance, fees, insurance, investment options and services.
3. Ready to move? To change your super, register to set up an account on your superannuation provider of choice. You can choose to ‘Rollover’ your funds from your previous superannuation account through your new provider by providing the relevant details or you can do this via the ATO – you also have the option to maintain your old superannuation and not rollover funds – check your benefits before you close an account to make sure you don’t end up worse off. You’ll also need to let your employer know if you want to change superannuation providers by filling out a Superannuation standard choice form from the ATO.

Whatever you decide, staying on top of your superannuation is just as valuable as staying on top of your other investments. Consider it your gift to your future self.